Employee (salaryman) tax deductions for assorted costs associated with work

[smalldog]

With the weather turning cooler my thoughts are also turning to my year-end tax return.

I understand from pub chatter there is a system whereby company employees can deduct expenses necessary for their work that are not covered by the employer: E.G:-

- commuting fees
- costs for business clothes necessary for work (suits/shoes),
- costs for training taken out side of work but will benefit your career/work
- Cost for media useful for one’s work not covered by the company (eg Financial Times or Nikkei subscription fee)

Etc. Etc.

I however cannot find anything about this online nor the process o need to go through to claim these deductions in next year’s tax return.

Can someone kindly point me in the right direction and assist with how I might take advantage of this system in 2022 please? What is it called in Japanese? Do any other members here use this system and how has it turned out?

Thanks so much.

[sutebayashi]

The commuting fees one is called 通勤手当 I think, but it should be handled automatically, and should already be considered by the time you do the end of year adjustment stuff.

The other one about business clothing is also just part of the standard deduction for salaryman workers too, I believe.

Not sure about the training and media ones though.

[ClearAsMud]

I imagine you're referring to the deduction for specified expenses (給与特定支出控除) that can be claimed by a salaried worker over and above the usual employment-income deduction (給与所得控除). If you search for "給与特定支出控除" you'll find a lot of Japanese sites that discuss it. Tax regulations were loosened to make more salaried workers eligible for the deduction beginning from 2013, although not many employees can actually take advantage of it. You claim it on a regular income-tax return, attaching receipts and company confirmations.

You've identified some of the expenses that qualify. There are six types in all: transportation (beyond what the company already pays), relocation expenses, study and training fees, fees for obtaining qualifications, trips home from tanshin funin assignments, and clothing and supplies needed in the course of performing one's duties at work and not reimbursed by the company (suits and uniforms, books and journals, entertainment expenses, and other items up to a maximum of 650,000 yen).

This page explains the details, including the following conditions of eligibility:

1) The expenses must be recognized as necessary for the job BY THE COMPANY (the company must provide written confirmation; the format for that can be downloaded here).

2) Furthermore, the deduction can only be claimed for amounts that exceed half of the amount received through the standard deduction if your salary is less than 15 million yen, or for amounts over 1.25 million yen if your salary is above that. A maximum does exist.

See this other page for several examples of calculations based on income, but if you have a salary of 4 million yen, for example, your designated expenses would have to exceed 620,000 yen in order for you to be eligible for the deduction; if your salary is 5 million yen, the amount rises to 770,000 yen. The page also notes that in 2018, there were 3,154 tax returns claiming this deduction, so it's not as though the tax office is being flooded by such returns -- not many company employees spend enough of their own money to qualify for the deduction in the first place. But those who do qualify are no doubt grateful for it.

[captainspoke]

I think the following is why I've never heard of anyone discussing/taking such deductions (or even discussing that). If you form your own business and pay yourself a salary there are any number of things that can be expensed, but that's quite different to the typical employee or salaryman.

...
1) The expenses must be recognized as necessary for the job BY THE COMPANY (the company must provide written confirmation; the format for that can be downloaded here).

...

... if you have a salary of 4 million yen, for example, your designated expenses would have to exceed 620,000 yen in order for you to be eligible for the deduction; if your salary is 5 million yen, the amount rises to 770,000 yen. The page also notes that in 2018, there were 3,154 tax returns claiming this deduction, so it's not as though the tax office is being flooded by such returns -- not many company employees spend enough of their own money to qualify for the deduction in the first place. But those who do qualify are no doubt grateful for it.

[smalldog]

Thanks gents - really useful info. Most appreciated. Will need to do some calculations and see whether it works out.